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The price of Bitcoin (BTC) fell to the key support level of $ 44,000-45,000 on February 28 for the third time in the past week.
The BTC / USD pair briefly fell below $ 44,000 on Bitstamp before making up for some of the losses, rebounding above $ 45,000 at the time of writing.
“ Complete rest ” for SOPR, financing rate
Some analysts have pointed to higher sales of miners as the reason for the latest price drop.
It’s a whale war, and you know who has the real power.
American institutional investors
– Coinbase Outflow = STRONG BUY
– Coinbase Premium = BUYBTC whales
– Reserve BTC = BUY
– Stablecoin entry TXs = BUYMinors
– Exits of minors = SELL
– Miner to exchange flows = SELL pic.twitter.com/fhVBp8qocm– Ki Young Ju 주기영 (@ki_young_ju) February 28, 2021
Fortunately, the third test of this key support level may have some silver lining for bulls. Glassnode data analysis resource Noted that the Bitcoin Spent Output Daily Profit Ratio (SOPR) has experienced a “full reset”.
The SOPR essentially shows whether the outputs spent are profit or loss at the time of the transaction. This key metric turned negative for the first time since September 2020. In other words, investors are now moving BTC with a slight loss on average, suggesting that profit taking has declined, according to Glassnode.
“In total, yesterday we saw a net loss on the channel of $ 243 million”, analysts said added.
“This is the lowest daily value since April 2020.”
Meanwhile, popular trader Philip Swift, co-founder of the Decentrader trading suite and creator of the Golden Ratio Multiplier Method, highlighted the SOPR crash.
He sees this as a potentially bullish turnaround for the price of BTC in combination with the derivative funding rate reset last week, as such events previously coincided with the start of new uptrends.
“The SOPR has now been reset (green on the chart), which means the portfolios are now selling at a loss,” he explained, adding:
“This is a strong ‘buy bottom’ signal in a bull market. This, along with the reset of derivative funds, is bullish.”
The last time the SOPR went green was five months ago, when Bitcoin was trading around $ 10,000. At the time, this was a major obstacle for BTC to trigger a new bull market. Since then, the price has increased more than five times to new all-time highs of around $ 58,000.
Nonetheless, many traders remain cautious as the market enters March, which has always been bearish for cryptocurrencies and all markets in general.
“I think March can be slow with a lack of confidence in traditional markets, but overall I’m bullish on Bitcoin and expect a significant rise over the next three months,” Swift said. in private comments.
$ 44K – $ 45K remains the key level to watch
In the meantime, Bitcoin traders are closely watching the $ 44,000-45,000 level. Trader Willy Woo, for example, says the $ 45K level is very strong support and expects any drop below that level to be bought aggressively if it occurs.
Prize distribution carried out by UTXO. This is the more precise chained version of the volume profile. The peaks represent the price at which most coins changed hands.
$ 45k on the upside is very strong support.
Any drop (if you’re lucky) into $ 39k is an obvious BTFD.
Data: @glassnode pic.twitter.com/Z4xbEr0jTv
– Willy Woo (@woonomic) February 27, 2021
Additionally, researchers at chain analytics firm Santiment believe that the entire cryptocurrency market is now dependent on keeping Bitcoin above this key level.
“It’s been a red weekend so far, with most eyes on Bitcoin as it rallied against the rise of altcoins,” they said, add:
Keep an eye out for the $ 44k support level for BTC as an indication to monitor all of the crypto. As well as the chain activity of BTC.
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